Pharmaceutical Industry

They have four legs, fuzzy faces and udders full of milk. To the uninitiated, they look like dairy goats. To GTC Biotherapeutics Inc., they're cutting-edge drug-making machines. The goats being raised on a farm in central Massachusetts are genetically engineered to make a human protein in their milk that prevents dangerous blood clots from forming. The company extracts the protein and turns it into a medicine that fights strokes, pulmonary embolisms and other life-threatening conditions.

The Supreme Court opinion that drew the most praise last week from a proudly "progressive" constitutional law group was written by perhaps the court's staunchest conservative, Justice Clarence Thomas. Thomas would have gone further than the court's liberals in a decision that allowed injured patients to sue drug makers. In a 24-page concurrence, he said the court should have declared that judges have no authority to void state consumer-protection laws based on "agency musings" from Washington.

In the debate on healthcare reform, one remedy for skyrocketing medical costs rarely gets mentioned: allowing the government to use its substantial buying power to negotiate lower prices for medicines. The drug companies, with the help of hundreds of hired lobbyists, have succeeded in keeping this proposal off the table, even though studies have shown it would save billions of dollars a year. If healthcare legislation is signed into law with no controls on drug prices, the pharmaceutical industry will have won a financial bonanza.

Big Pharma got bigger on Monday with Merck Co.'s announcement that it would acquire rival Schering-Plough Corp. in a cash-and-stock transaction worth $41.1 billion. And the deal is being made easier by U.S. taxpayers. Faced with tough competition from generics, fewer potential blockbuster drugs in development and the prospect of a government overhaul of the U.S. healthcare system, drug makers are consolidating. In January, the world's largest pharmaceutical company, Pfizer Inc.

Drug companies were hit with a series of bad breaks Monday, led by Novo Nordisk's announcement that it discontinued its experimental AERx inhaled insulin system and is expected to fire most of its 360-person team on the project in Hayward, Calif. In addition, Merck & Co. and Schering-Plough Corp. said their cholesterol pill Vytorin worked no better than an older, cheaper drug, threatening the medicine's sales. And U.S.

Amgen Inc. said Monday that it had agreed to sell the rights to 13 of its experimental drugs to Takeda Pharmaceutical Co. in a bid to defray costs and generate cash as sales of its biggest-selling anemia drug slow amid safety concerns. Under the agreement, Takeda, Japan's largest pharmaceutical company, will pay Amgen $200 million up front and as much as $702 million more if key development milestones are met.

Fred Hassan rode to the rescue of a foundering Schering-Plough Corp. in 2003, and by 2006, with a remarkable turnaround declared complete, the company was back on a growth trajectory. But the highly regarded chief executive unexpectedly finds himself at the center of a firestorm involving the cholesterol drug that fueled the company's reversal of fortune. The furor over Vytorin threatens the reputation of the drug industry's golden boy and, some say, his job. Schering-Plough and Merck & Co.

You'd probably be interested in a drug that'll keep you peppy even when you're running on fumes. How about a drug that can cause depression, anxiety, hallucinations, psychosis, mania and suicidal thoughts? How about chest pain, sores or serious rashes? You had to sift through the fine print of full-page newspaper ads that ran coast to coast last week to learn that these drugs are one and the same. The ads were for Provigil, which its maker, Cephalon Inc.

For now at least, Vytorin, the controversial cholesterol-lowering drug under investigation by Congress and state attorneys general, will remain on the market. But its TV ads will not. In mid-January, Schering-Plough Corp. and Merck & Co., which jointly market the drug, pulled the ads portraying family members dressed like food items to show genetic causes and food sources of high cholesterol.

The government proposed guidelines Friday for how pharmaceutical companies can use medical journal articles to market drugs for unapproved uses. The Food and Drug Administration guidelines, criticized by some lawmakers as too lenient, have been eagerly anticipated by drug and device companies such as Pfizer Inc. and Medtronic Inc. that often use medical literature for marketing.